PayPal will test lending to U.S. eBay sellers

PayPal says it plans to expand a U.K. test that extends credit to eBay Inc. sellers to the United States.

PayPal would not comment further on its plans to lend to sellers except to say that the U.K. test is with a small number of sellers and that the U.S. test will launch later this year.

EBay-owned PayPal already extends credit to buyers. And shoppers who use PayPal credit spent 39% more on average during the last three years than those who did not borrow, said Gary Marino, PayPal’s senior vice president, global financial services, and head of the Americas, said at eBay Inc.’s Analyst Day late last month.

“Credit increases engagement,” Marino said. “Consumers who use PayPal credit are by far our highest value customers.” Marino touched on the new test to lend to eBay sellers only briefly during his presentation. “Marketplaces [such as eBay.com and eBay.co.uk] are great innovation labs for us to test new experiences and new products,” Marino said. “We’ve done it successfully with credit and we are experimenting with new capabilities like small business lending.”

In discussing PayPal’s general plans for growth, Marino said PayPal plans to focus on signing up more footwear, luxury and digital commerce e-retailers to accept PayPal payments.

“We are seeing huge opportunities to take advantage of digital commerce such as gaming and content which are consumed across online, [gaming] consoles and mobile,” Marino said.